It appears that construction intentions across Canada’s real estate market still remain robust amid the high interest rate environment.
According to the Canada Mortgage and Housing Corporation (CMHC), the trendline for housing starts rose for the second month in a row, a positive indication backed by robust housing starts in July. The Canada Mortgage and Housing Corporation (CMHC) reported a 2.8% uptick in the trend, marking it at 242,525 units, an increase from 235,819 units noted in June. This trend measure is derived from a six-month moving average of the monthly SAAR for all Canadian regions.
“Despite a decrease in the SAAR of housing starts relative to last month, July saw a healthy number of actual housings starts from a historical perspective. This pushed the trend of housing starts upward for the second consecutive month. Market intelligence suggests multi-unit projects started in June and July were likely financed a few months prior, so, the effect of the most recent interest rate hikes on housing starts remains to be seen,” explained CMHC chief economist Bob Dugan.
However, not all news was optimistic. July witnessed a 10% decline in the SAAR of housing starts across Canada, sitting at 254,966 units. Despite this dip, it’s significant to highlight that June’s figure of 283,498 units represented the highest count for the year. Moreover, the total SAAR housing starts for the month still stood 7.4% over the 5-year average.
Breaking down these figures, urban centers witnessed an 11% fall in the monthly SAAR totalling 234,857 units in July, multi-unit urban starts also saw a 12% drop, and single-detached urban starts decreased by a lesser 4%.
Zooming into the metropolitan statistics, both Vancouver and Toronto, two of the nation’s housing hotspots, experienced declines in their July SAAR housing starts— plunging 23% and 29% respectively. Meanwhile, the Montreal, Calgary, and Edmonton CMAs experienced robust growth, with their housing starts surging by 12%, 33%, and a whopping 67% respectively.
Information for this story was found via the CMHC. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
